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Eh? (parts 1 and 2)

“For us it provides market access,” said C&C chief executive Stephen Glancey. “So we will be able to drive our brands through their estate over time.

“Vertical integration in the UK has always been a successful model. You have Fuller’s and Young’s, for example – they own pubs and they own breweries. That secures a space in the bar for their brands and they use that to enhance the business.

“For brewers and drinks companies to have some sort of ability to influence the choice in pubs is still very relevant.”

Quoting Young's as an example of a vertically-integrated company in 2017?

Eh? (part 2)

Investing £37 million for 47% of a pubco with 845 pubs works out at £93k per house which is either: a) a bargain; or b) shows that Admiral Taverns has a basket-case of an estate (that can't even have much of a 'change of use' upside). So bearing in mind part 1, how good was their due diligence?

“For us it provides market access,” said C&C chief executive Stephen Glancey. “So we will be able to drive our brands through their estate over time.

“Vertical integration in the UK has always been a successful model. You have Fuller’s and Young’s, for example – they own pubs and they own breweries. That secures a space in the bar for their brands and they use that to enhance the business.

“For brewers and drinks companies to have some sort of ability to influence the choice in pubs is still very relevant.”

Quoting Young's as an example of a vertically-integrated company in 2017?

Eh? (part 2)

Investing £37 million for 47% of a pubco with 845 pubs works out at £93k per house which is either: a) a bargain; or b) shows that Admiral Taverns has a basket-case of an estate (that can't even have much of a 'change of use' upside). So bearing in mind part 1, how good was their due diligence?

I suppose it's quite possible that b) might be the answer.What isn't clear is how much debt is associated with the pub estate,and this could be via a securitisation.Also 47% is still a minority equity position which much attract some kind of valuation discount.

Looks like some larger Pubco. will take out this group to bulk up their estate. The UK pub sector in general is a very mature industry so more consolidation seems likely until the competition authorities begin to concern themselves about monopoly /ologopily influence ................. which must still be a long way off.